I believe this patch finally fixed this issue:
commit c546779b32d8be23475b3b062e3ebc9235365c0d
Author: Chase Douglas <[email protected]>
Date: Thu Feb 9 16:56:29 2012 -0800
Ignore motion during touch count changes on semi-mt devices
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https://bugs.launchpad.net/bugs/365943
Title:
Mouse cursor jumps when two fingers are used
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